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June 21, 2017

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Wealthiest individuals in China to rise by 18%

THE ranks of China’s wealthy will again grow by double-digits this year, a report said yesterday.

The 2017 China Private Wealth Report by Bain Consulting and China Merchants Bank put the number of high net worth individuals (HNWI) — those with at least 10 million yuan (US$1.47 million) of investable assets — at 1.6 million in 2016, nearly nine times the number a decade earlier.

The report, issued every two years, forecasts a slower growth pace for the wealth business this year, but still sees substantial gains.

It projects an 18 percent increase in HNWIs to 1.87 million by the end of the year, and a 14 percent increase in China’s private wealth market to 188 trillion yuan from 165 trillion yuan. In 2014-2016, the market grew 21 percent a year, the survey said.

“Some asset classes like real estate are likely to have a larger impact on the slowing growth rate,” Liu Xin of Bain Consulting told reporters, adding that increased regulation and oversight of investment products including property, wealth management products and insurance will contribute to the slowdown.

Investable assets

According to the report, around 120,000 HNWIs had at least 100 million yuan of investable assets, compared with fewer than 10,000 in 2006.

The percentage of HNWIs with overseas investments increased to 56 percent this year, from 19 percent in 2011, but the overall percentage of assets invested overseas has been stable since 2013.

The top five destinations for overseas investment were Hong Kong, the United States, Australia, Canada and Singapore although between 2015 and this year Hong Kong’s popularity fell 18 percent and the United States dropped 3 percent.

High net worth individuals are keen to diversify the location of their investments and are looking further afield to places such as Australia, Singapore and Canada, Jennifer Zeng from Bain said.

According to a 2015 study by Capgemini, China’s population of HNWIs, which it defines as those with investable assets of US$1 million, ranked fourth, behind the US, Japan and Germany.


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